Legislative Assembly for the ACT: 2017 Week 09 Hansard (Tuesday, 22 August 2017) . . Page.. 3163 ..
MR COE (Yerrabi—Leader of the Opposition) (6.25): Icon Water has two primary purposes: the delivery of water, sewerage and associated services; and to manage the territory’s investment in ActewAGL. In budget statements B, Icon Water lists its four objectives, the first one being “to operate at least as efficiently as any comparable business”. Unfortunately, we have seen one very clear example of Icon Water failing to meet this objective in the signing of the shared services agreement with ActewAGL. Canberrans have been continually hit with rate rises and hikes in water and electricity prices by successive Labor-Greens governments. Icon Water billed Canberrans an estimated $303 million in 2016-17. The value of the two shared services agreements today accounts for close to nine per cent of what they bring in, yet the Labor-Greens government and Icon Water continue to claim that these agreements do not have any effect on the cost of services.
That is, 10 per cent of their revenue goes straight out to ActewAGL by way of these two shared services agreements. If any other business—which Icon Water supposedly is—were to let 10 per cent of their revenue go, surely that would be of interest to the shareholders? Surely if there were a decision that affected 10 per cent of their revenue, it would draw the attention of the shareholders and they would ask questions? Unfortunately, that did not happen.
When water prices are set in the territory, the ICRC takes into account the operating costs of Icon Water. This information is evaluated in conjunction with other factors, but at its core the operating costs are a significant contributor to the prices they set for water. When Icon Water is compared to other similarly sized entities, it is clear that the value of these two agreements has been significant. The artificial inflation of the cost of services has considerably impacted Icon Water’s operating costs, which in turn hits the hip pocket of Canberrans. With even more unknown increases built into these shared services agreements with ActewAGL, there is no doubt that the percentage of revenue going towards the contracts is likely to rise and Canberrans’ bills will also increase.
When I asked whether Shared Services, the government and in particular the Treasury had been approached to market test or evaluate the value for money that the taxpayer receives out of this agreement, the Chief Minister responded, “Not that I am aware of, no.” When I asked, “Does $27 million seem excessive to you for shared services?” the Chief Minister stated, “I have no reason to see why that is an issue.” He saw no reason why paying $27 million for shared services is an issue.
The fact that the Chief Minister does not have any issue with this dodgy procurement or the value for money the territory gets is a clear indication of the apathy that this government has with regard to serious financial matters, in particular the management of Icon Water. It is the same apathy which led to the LDA running wild. This lack of oversight is, in a way, what Ms Le Couteur was talking about with regard to the responsibility of the shareholders.
Perhaps if there were more interest shown by the Chief Minister or by the other shareholder we might not have a situation whereby Icon Water management feel it is